CEOs buying big houses is a bad sign

"BobZ sent me a link to this fun data-dumpster-diving paper showing how CEOs buying big houses -- greater than 10,000 sf -- is a bad sign for future shareholder returns."

We study real estate purchases by major company CEOs, compiling a database of the principal residences of nearly every top executive in the Standard & Poor's 500 index. When a CEO buys real estate, future company performance is inversely related to the CEO's liquidation of company shares and options for financing the transaction. We also find that, regardless of the source of finance, future company performance deteriorates when CEOs acquire extremely large or costly mansions and estates. We therefore interpret large home acquisitions as signals of CEO entrenchment.